Frederick County Short Sale Blog | Homes for Sale in Frederick Md

What's New in the Frederick Real Estate Market

What's the 'State of the Real Estate Market' in Frederick County?  Besides an increase in sales, a decrease in inventory and a leveling off of the price declines, we're seeing challenges arising in the appraisal aspect of some transactions.

If you imagine the real estate market as an accordian, or a slinky, for those less musically inclined like myself, the action is sqeezing in, with the transitions in the market that I just mentioned.  We're moving from a wide-open buyer's market with lots of choice and terms favoring the buyer, to a seller's market, with less inventory to choose from, and prices stabilizing. 

Appraisals are based on past statistics, usually the prior 6 months of comparable sales.  In a declining market, its easy to get an appraisal that is a little higher than the selling price.  A buyer has no problem getting a loan for an amount that is lower than the appraised value.

When the market is changing, and demand is such that there are mulitple offers on a house (a real life experience for one of our buyers) and the buyer wins the house by bidding more than list price, then you find appraisal issues.  The appraisal is based on comps from up to six months ago, which are lower than the price the buyer bid to win the house in competition.   If level heads prevail, usually something can be negotiated, a lower sales price, more cash from the buyer, or most often, a combination of the two.

When the accordian is 'squeezed' to the max, and starts to expand, that's like a transition from a buyer's market to a seller's market.  Sellers and buyers need to have lots of patience and an open mind during these challenges.  They need to keep their goals in mind:  for the buyer its successfully buying their house of choice.  For the seller it's successfully getting their home SOLD.   

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The Highland Group